Rookie's Psychology

I'll name 2 most common rookie mistakes.

1. Dilutional Expectation On Winnings : Losings (a.k.a. Profit Factor)
Rookie Traders think that they can make $100k by winning $100k and losing $0. I'm here to tell you that you are high (smoked weed too much).

Then you might ask:
So how exactly do I make $100k?
By winning $101k and losing $1k? lol.
By winning $105k and losing $5k? No.
By winning $150k and losing $50k? Not exactly.

So?
The ultimate answer:
By winning $1M and losing $900k

Wait what!? But that's nuts!

Can't accept this? Then you better go play chess instead.


2. TOO MUCH CONFIRMATIONS
Rookie traders be like:
First, I'll check the Dollar Index to analyse the current US dollar strength

Then I'll draw trend lines on the Daily chart to understand where the preceding trend is heading,

Then I'll go to the H4 chart and draw ONLY the major support and resistance / major supply and demand,

Then I'll go to the H1 chart and find candle stick patterns, such as: pinbars, engulfing candle, morning star, etc.(and all those marketing shyt),, or I'll just identify the "long" wick candles and decide after it has formed.

Some instances also include the following "analysis":
-Fibonacci retracement, and its derivatives
-Elliot wave count
-W.D. Gann theory
-Round number theory

And then, there are some of you who took it to the next "level":
then I'll make my final decision on the 1min timeframe to find order-freakin-blocks and I'll "hunt " stop-losses because I'm that cool

BY ANY MEANS I DO NOT HAVE A PROBLEM AT ALL WITH THOSE THEORIES, I'M JUST MAKING A POINT THAT MOST RETAIL TRADERS TAKES UP TO 10 CONFIRMATION SIGNALS TO PLACE A FREAKIN TRADE.

In the end, after TRYING TO PREVENT LOSSES, you lost your mind. (Or some book sellers might call it: "paralysis analysis")

Remember rule #1 To make $100k your ACCUMULATED PROFITS needs to be $1000k and your ACCUMULATED LOSSES needs to be $900k.

Re-read it twice.

A newbie needs to start with demo account. Trade without practice it’s risking your money. I will suggest to you, you should be download demo account, start with this that’s easy, and risk free way. When you get confidants, you will invest money. You can learn more about forex by using tutorial that’s really helpful for you.

First trade and learn trading in demo account. Then invest small capital in micro or cent account. If you feel confident then go for big investment.

Micro or cent account is best to learn in term of trading psychology.

Higher timeframe gives more accurate information than lower timeframe. However, timeframe depend on trading strategy. If you are a scalper, you have to go for lower time frame like M5, M15.

That"s good, every trader should trade risk-free. If a trader is trading at extra risk in every trade, he will not be able to sustain his valuable money.

It is quite hard to trade risk freely. However, traders can reduce the risk in trading.

Psychologically, it is very difficult for a beginner to start trading on a real account, and here he will have to face many problems.

My psychology is :

1.trade for 4 point on S&P500 (futures) then you have by 1 lot size 200usd cash - repeat this 5 days and is 1000usd in one week.
2. Gold i trade for 2 dolars - 1 lot give me +-200 usd cash.

generally newcomers always try to bring profit with no learning . as a result when trading in practical we the newcomers always fall a great trouble.

why do I feel like bots are replying my thread?
Am I missing something here?

Yes, that's one of the biggest mistakes that newbies make. They want to make quick profits without nay major hard work, which is kinda impossible here in forex.

I don't think bots answer this thread, it's just that the question is so primitive and that all the answers are pretty standard.

I have demo-traded for a while now and I have found my set-up. In order to work on psychology, I feel I need to put some skin into the game. With that being said, I plan on opening my live account to trade micro lots. Staring at 1500 units with no more than 3 trades per week, preferably 2, and a stop loss of 5.00. I can monitor the account for March, April and May and see how I performed for the quarter.

If I am to move to the next level, I need to add the live funds. I think I am getting bored in demo and no longer seeing it as real. My demo account has helped me get to this point. I have learned that I do not need all the extra bells and whistles I thought I needed started out. I have come to appreciate pure price action. I have come to love simplicity. Now, I just need to get my psychology in order to work the plan I have created. It is no longer about the pair or price, its really about me. My control, discipline and execution.

FinoptUSA

thanks for your nice post , so many fine lines got from your post with more information's. happy trading

I wish you success! For how long have you been trading on a demo account?

Thank you,

I started trading demo about 1 year ago. I actively began learning Forex trading about a year and a half ago. I started out in stocks after getting my MBA from University. The time constraints of stocks did not work for me. After learning the theory and fundamentals of Forex and researching brokers, I started demo. I have finally gotten to point of not reacting to price and following a real set-up. The next phase is tackling emotions of real dollars. Slow and steady is my motto. I am looking for long-term success not the fast quick bucks. Wishing you success as well.

FinoptUSA

Personal Golden Rules [Taken from my discord channel]
- Accept that you will be wrong. Take the loss and learn from it.
- Accept that you will lose, even if you're right. Stick to your rules.
- Be disciplined. Keep to your rules. Keep emotions away.
- Capital preservation is important. Keep your risk consistent. If you risk 1% of your capital, then keep it constant. If you risk 3% of your capital, keep it constant too.
- If you're worried about how much you're going to lose, reduce your risk. You're risking too much now.
- No should've / could've / if only. I would have been a millionaire by now.
- Overtrading doesn't mean higher return.
- Risk management is important.
- React; Do not predict where the price will go. Let the market tell you where the price will go.
- Strategies based on luck is not consistent.
- There is always another setup. If you miss this one, wait for a re-entry or just close your charts. Do not enter at a bad price.
- Treat your results in terms of % and not monetary value. My $1,000 a trade risk could be 1% of my capital, but 10% of yours.
- You will miss a lot of winning trades. Be patient.